What Is A Wealth Advisor And Are They Worth It?

Ideally, it’s safe to say that a majority of people would love to have a personal fortune that may require working with a wealth advisor.

And if you have reached a point in your life where you need help with your assets and wealth, then you have reached a status that many others dream about!

But having a massive net worth and more money can come with even more responsibilities you might be unsure about. Even if you know finances and investing quite well, you should consider an expert to help you maintain your fortune.

That’s where a wealth advisor can be your trusted financial partner. Their goal is to ensure your needs are met and that you are set up successfully for now and the future.

But what do wealth advisors do exactly? What should you look for if you need one?

What Is A Wealth Advisor?

Wealth Advisors are financial consultants for clients who are already affluent. Their job entails providing high-net-worth individuals with strategic advice and action for their finances, including the use of tax-advantaged accounts, estate planning, and risk management.

Instead of managing the day-to-day finances of their clients like financial advisors would, wealth advisors are focused on nurturing and protecting what is already available. 

If you are lucky enough to build a high-net-worth, protecting the wealth is going to be key to maintaining your lifestyle and protecting your family for generations to come. Wealth accumulation is just the beginning, as wealth management is what’s really necessary in order to continue financial independence. 

The job title of “wealth advisor” is also just another label and category of a financial advisor. And this title does not require specific certifications or education, but good wealth advisors will hold various certifications.

Would you want someone helping and managing your millions without proper experience? I’d hope not! 

How much do Wealth Advisors make?

Wealth Advisors can make lucrative salaries alongside generous commission structures. Junior advisers can expect to make between $90k and $150k, whereas more experienced wealth managers could make up to $300k. That said, earning 7-figures is not unheard of either for this role. Expect your wealth advisor to take between 0.75% and 2% in commission alongside the annual fees charged. 

What Does A Wealth Advisor Do?

A wealth advisor or wealth manager is a type of financial advisor who utilizes the spectrum of financial services available, such as financial and investment advice, legal or estate planning, accounting, and retirement planning, to manage an affluent client’s wealth for one set fee.

Wealth advisors do not have a specific set of jobs per client but provide holistically tailored advice and strategy based on the situation of the wealthy individual.

Here are some examples of the types of financial actions your wealth advisor may take: 

  • Private banking investments
  • Tax planning
  • Estate planning 
  • Accounting
  • Retirement planning
  • Investment advice
  • Helping create trusts
  • Philanthropy 

Typically, a wealth manager and advisor may even be involved in legal proceedings and may be present for prenuptial agreements and divorces, for example. This is especially true if there tons of assets and mediation happening. 

What to Look for in a Wealth Advisor

Typically, to work with a wealth advisor you’ll need a minimum investment or net worth of a million dollars or more. 

But if you reach that point where you need help and want to choose someone to help manage your wealth, you’ll need to do some research.

After all, whether this is generational wealth or assets built from the ground-up, you want to ensure you choose some trusted to help handle your wealth and money. 

When comparing wealth advisors, or wealth management firms, you should look for a couple of key features. 

1. Make sure they understand your goals

Are you looking to secure your wealth or grow it more? Do you need a specialist in tax advantage strategies, or are you looking for a family encompassed plan? Do you need someone experienced in gifting and charity? Ensure that the wealth advisor you choose lines up with your overall values, and is focused on your specific and personal goals. 

2. Find out the fee structure

Wealth advisors have different charges and fees based on the structure of their business. Some will charge for assets under management (aka for a percentage of the money managed), whereas others may charge a flat fee annually.

Alternatively, those who work with specific products may charge per plan or project; and take a commission on your purchases or trades.

Whichever the fee structure, make sure you know how much it’ll cost you before signing on the dotted line. 

3. Accreditations and Certifications

Ensure that your chosen wealth manager is fully certified and accredited. Hopefully, you won’t bother with any non-qualified candidates — but you should always ask for proof of accreditation before entering into a relationship.

Remember, someone can call themselves a wealth advisor without any formal education or certifications, so vet your choices carefully. 

4. Ensure the service is personalized

Your money, needs, and lifestyle are going to be totally different from the other clients on the roster. Make sure you select a wealth manager who understands that; and who can provide a personalized service tailored to your specific situation. Strategies for others may not work for you.

You may also want a team of advisors, each of who might have a very unique skill. For example, you can work with a firm where maybe you have three wealth advisors, each with specific expertise that will help you. 

5. Choose someone trustworthy

If you don’t get along with your wealth advisor, you’re not going to trust them to protect your money. So take the time to have chat and have multiple conversations, and ensure you connect on a deeper level than just the serious finance stuff.

Building a solid relationship with an advisor you can trust can sometimes pay off in the long run, and outweigh the fees. 

How do I Find A Wealth Advisor?

When doing your search online, you’ll find many financial services companies that offer wealth management and wealth advising as services. You may also find those who are strictly focused on wealthy individuals. 

Here are two of the modern services that have grown quite popular for the general investor, but also the high-net-worth individual. 

  • Ellevest is a robo-advisor that is tailored towards women and built to help more women succeed with their finances and investing. While it is open for anyone to join, Ellevest also offers private wealth management for those with $1 million+ in assets. They provide a team and are there to learn about your goals. 
  • Personal Capital has become a giant in the financial space in recent years with tons of free financial tools, net worth monitoring, and investing. They also offer a wealth management option that includes personal financial advisors and access to other investment specialists. They have three tiers $100k-$200k, $200k – $1 million, and then private services for those with $1million+ in assets. 

As you start comparing wealth advisors or firms, keep in mind what is important to you and what you need the most out of this individual or team.

What services are you looking for? What specialties do you need? What are their credentials and the fees for managing my assets? 

Run through it all and ensure you have a conversation with anyone you are considering. 

Wealth Advisor Vs. Financial Advisor

Financial advisors tend to work with the day-to-day finances of individuals in order to help you start to build wealth and reach financial success. On the other hand, a wealth advisor is a type of financial advisor, but they work with the assets already accumulated in order to protect your financial situation. 

Wealth managers often have more control, and they have the ability to make financial decisions on your behalf. Alternatively, financial advisors work in a more collaborative style; giving you suggestions to run with. 

Those wanting complete money management and have anywhere from $500k – $1 million+ might want to choose a wealth advisor; as they tend to take a holistic approach.

But if you’re just looking for individual services; such as budgeting, investing, and goal tracking, then a financial advisor may be better suited for you. 

Tip: A wealth advisor does not require accreditation, but you want someone who has gone through the proper channels and has a plethora of experience. Take a look Financial Industry Regulatory Authority’s BrokerCheck tool, to verify an advisor is registered with the SEC. 

Is A Wealth Advisor Worth It?

Unless you have amassed a high-net-worth or millions in assets, then a wealth advisor probably will not be worth it for you. However, if your assets have grown significantly and you are missing key knowledge in various financial areas, then someone with the right experience could be great to work with.

Plus, even though wealth advisors are paid from your pocket, they should be cost-effective in the long run as they save you money, help you maintain and grow your wealth, and accomplish much more.